Coming in the first five months of his administration, Ecuador's President Lenin Moreno has outlined new economic reforms which include tax reforms and a reduction in public spending.
In a televised speech to the nation, the head of state said that companies which register profits below US$300,000 a year will not have to pay the tax on their profits and micro-enterprises already established will stop paying income tax on their first US$11,000 of profit. The plan will also eliminate the tax on rural lands.
Additionally, there will be a reduction in public spending of US$500 million for 2018 but there was no mention of any job cuts although he did announce new types of labor contracts.
"Exports have fallen, the price of oil remains low, the construction sector has contracted and public debt is in a difficult condition," he said.
He promised that the measures will not bring about a rise in VAT, oil or electricity prices in the form of a “paquetazo” or austerity package.
The president said, "In order to guarantee work and employment, I will consult the people on the elimination of the so-called 'Law of surplus value,' which, since its announcement, generated fear and affected construction," referring to a Correa-era law that targeted land speculation gains.
Moreno also told the nation, "To sustain and strengthen dollarization, I will present a law that encourages the repatriation of capital ... Those who bring their productive capital in the next 12 months will be exempt from income tax for up to five years."
In an interview with teleSUR, Professor Carol Murillo said that Moreno was no longer continuing the Citizens' Revolution of the past ten years, led by former President Rafael Correa and leftist coalition PAIS Alliance.